The European Investment Bank auctioned emissions permits to raise funds for low-carbon energy technologies, with an emphasis on the benefits of carbon capture and storage(CCS). This was a particular benefit opportunity for Europe’s larger source of CO2 emissions.
The EU quota of emissions permits is called EU permits (EUAs). The Climate Speculator is quoted as saying: “The European Commission on Thursday said it expected to raise between €1.3 billion and €1.5 billion by October to support two to three CCS plants, plus some renewable energy projects from auctioning 200 million EUAs, the first tranche of sales to raise a total of €300 million.
It is widely seen as a disappointment that the original expectations of the EU’s original pre-crisis objective in 2007 to build 10-12 CCS projects will not happen in the timeframes. To blame , the EU financial crisis has taken us to a different place.
The EU’s emissions trading scheme caps the emissions of factories and power plants, and, since 2005 they have got most EUAs for free in a gradual transition to the market to assist the bigger polluters ranging from coal plants to steel mills. Opposition to the scheme is that bigger polluters captured windfall profits.
In the transitional process to the market, from 2013, most power plants will have to source their EUAs under State or EU-run auctions. Sales run by the European Investment Bank in 2012 were a forerunner of that, and are to raise funds for innovative low-carbon technologies and to benefit CCS technologies.
The problem that is now apparent is that the market is too readily participated in and this puts pressure on the attempts to stabilize the carbon price. To counter this the European Commission proposes to withhold permits and boost prices by “backloading” auctioning. That is delaying sales due next year until later in the 2013-2020 trading phase. This strategy is designed to maintain the EU carbon prices at no lower than €8.
CO2land org sees some parallels with the situation in Australia where political opposition oppose carbon prices, which is claimed to raise electricity prices. Do not be surprised if a new advocate springs up named something like ‘real carrot to dangle in front of ministers’ noses”.
Credit for the original story on EU ETS goes to Gerard Wynn Published 16 Jul 2012. ”The Climate Speculator source is ‘This article was originally published by Reuters. Republished with permission.’
co2land.org 